SCHRODER Investment Management (Hong Kong) says the likelihood of higher interest rates will suppress the territory's stock market until the end of the year, but greater strength in the mainland economy will buoy its business next year. The fund-management company's managing director, Richard Haw, said the United States Federal Reserve would probably increase interest rates between now and the end of the year. He said the territory, with its US dollar-linked currency, would follow suit and this would cap the Hang Seng Index at 11,500 or 11,600. Any potential rate rise was already priced into the territory's market, he said. 'This has been probably one of the most well-signposted potential increases in interest rates in history.' Next year Hong Kong would benefit from the mainland economy's greater strength as credit restraints were eased, he added. 'We see the Chinese economy as just beginning a new expansion, a new economic cycle which will go for another five years or so. And with that wind in its sails, Hong Kong ought to expand.'